2.
As per the existing instructions contained in these Circulars, the DEPB credit
is to be normally given on the FOB value of the exports. However, where on the
basis of market inquiry it is found that the declared value of the export goods
is more than their present market value then the present market value shall be
considered for the purposes of allowing DEPB Credit.

3.
Field formations have sought clarification whether these instructions are also
applicable to those goods where the declared f.o.b. value is more than the
declared present market value. Also, whether these instructions shall also be
applicable to those goods whose DEPB Credit rates are less than 10%.

4.
It is clarified that wherever, the declared f.o.b. value is more than the
present market value as declared by the exporter or as ascertained by the
Customs authorities, the present market value shall be the basis for granting
DEPB credit. Further, this principle will be applied to all export products
whether their rates are less than 10% or are 10% or above 10%.

5.
As per the existing instructions the verification of the present market value
through market enquiries should be specifically assigned to the Special
Intelligence & Investigation Branch of the Custom House and not to the
Assessing Officer and the enquiry must be completed and the final view taken in
30 days except where the Commissioner of Customs has specified that it is
necessary to extend the period beyond 30 days to collect further
information/evidence, the enquiry period may be extended upto 90 days from the
date of the Shipping Bill. The show cause notice should be issued within the
extended period of 90 days. However, if the Commissioner of Customs is satisfied
that the enquiry for determining the present market value of the goods has to be
extended for reasons involving fraud/collusion/wilful mis-statement or
suppression of facts, he may extend the period of 3 months till such further
period as is deemed necessary after recording the reasons thereof in writing.

6.
It has been brought to the notice of the Board that in many cases the
intelligence regarding over-valuation of the exports is received much after the
exports. Therefore, the existing instructions pose a legal hurdle in
investigation of DEPB frauds where the DEPB credit has already been availed and
in many cases even utilised.

7.
This issue has been examined in the
Board. It is clarified that in respect of
the cases involving fraud/collusion/wilful mis-statement or suppression of
facts, etc., the enquiry can be opened at any stage within a period of 5 years
and notice may be issued for recovery of import duty involved.

8.
Suitable public notices for information of the trade and standing orders for
guidance of the staff may kindly be issued accordingly.